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Industry 4.0 Could Make India A Global Leader In Manufacturing

10/04/2015 8:01 AM IST | Updated 15/07/2016 8:25 AM IST
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An Indian woman employee of Scania works at the company's new manufacturing facility in Narasapura, some 50 Kilometers (31 Miles) northeast of Bangalore, India, Monday, March 30, 2015. The Swedish commercial vehicle company announced the inauguration of its bus manufacturing facility Monday. The plant, which has a capacity of making about 1,000 units per year, shall be serving the Indian market and becoming a hub for exports to other markets in Asia, a company release said.(AP Photo/Aijaz Rahi)

For more than 20 years now, India and China have been competing for the lion's share of global manufacturing -- and until recently it looked like China was about to win the battle. In fact, India's manufacturing contribution to GDP still is a mere 13% compared to 30% for China. There is, however, an opportunity to turn the tide in India's favour as China's shrinking labour arbitrage and strengthening Yuan against the US Dollar have encouraged investors to look towards more cost-effective destinations like Vietnam and Indonesia.

India's advantage is its ample supply of skilled technical labour, although infrastructure issues, bureaucratic hurdles and unreliable supplies of resources like power and water could have a dampening effect. Already Havells, Godrej, Bosch and other large manufacturers have shifted units to India.

India has a humungous task ahead in its dream of becoming the world's preferred manufacturing destination. And only half the battle will be one if it manages to clean up its infrastructure, manage its bureaucracy and improve ease of doing business. In the race against China, we must not seek to imitate but instead keep our eyes on the trends and changes that are shaping the industry while playing on our key strength of engineering skill and know-how.

"Industry 4.0 is a meeting of real and virtual worlds in manufacturing and involves the full integration of manufacturing technologies and systems to make a 'smart factory'."

Industry 4.0 has been heralded as the future of manufacturing, and the future for India is in ensuring its spot as the "digital factory of the world". India's thrust towards "Make in India" should keep in cognizance Industry 4.0 and begin its positioning in this space. We have seen that each industrial revolution has happened faster than last, so if India acts soon it can surpass all of China's work in the last 20 years to become one of the manufacturing leaders of the world.

Industry 4.0 is a meeting of real and virtual worlds in manufacturing and involves the full integration of manufacturing technologies and systems to make a "smart factory". The smart factory is a highly flexible manufacturing set-up that is digitally interlinked with every aspect of the manufacturing ecosystem, from suppliers to customers. The shop floor of a smart factory consists of intelligent, networked machines that operate autonomously to achieve mass customisation of intelligent, networked products.

"India's IoT [Internet of Things] industry is expected be worth US$ 15 billion by 2020, which means our share will be a less than 10% of the global opportunity.... India will need to invest in skill and technology development as well as R&D facilities to develop the local market."

According to an HIS Technology report, industrial automation accounted for more than half of the installed base for all Internet-connected devices in 2012. "By 2025, the sector will account for nearly three-fourths of all connected devices... a compound annual growth rate of 36.3 per cent." The opportunity is humungous, needless to say.

Here are a few steps that India needs to take to ensure a manufacturing success story in Industry 4.0.

Grow its fledgling Internet of Things (IoT) industry: Without seamless data integration there can be no Industry 4.0 - its future is in the growth of the Internet of Things market. IoT is needed to connect all the heterogeneous devices in the industrial automation system and network them together to create the Smart Factory. The Indian IoT industry although nascent, is an important part of the Digital India imperative to transform India into a digital, knowledge-driven economy. India's IoT industry is expected be worth US$ 15 billion by 2020, which means our share will be a less than 10% of the global opportunity, which Gartner estimates to be US$ 1.9 Trillion by 2020. India will need to invest in skill and technology development as well as R&D facilities to develop the local market.

Develop a robust data security environment: While the Internet of Things forms the backbone of Industry 4.0, without a robust security infrastructure there can be no practical application of the Smart Factory. From protection of intellectual property, IT networks in manufacturing systems, company and customer communications, security needs to be imbibed into the factory's architecture. Steps towards building a more conducive environment have to be two-fold, with more stringent government regulations for data protection and security, backed by a developed Security Services industry with the ability to manage advanced targeted cyber-security threats and attacks.

india manufactiring

Skill development: Implementation of educational structures and didactic approaches from corporations will form an important aspect in preparing India for leadership in Industry 4.0. Several areas where India has not made too much progress yet, such as cognitive robotics, advanced automation, Industrial ICT, automation bionics and other streams of qualitative skills will now need to be developed. Safety-related capabilities also come into play with more human-machine-cooperation and engagement. While vocational training from corporations can be adopted to some extent, training at grassroots in universities through specialised curriculums and master programmes in "Industrial Cognitive Sciences" will become imperative. The Skill India initiative is thus closely linked with the success of Industry 4.0 in India.

India will participate at Hannover Messe 2015 as partner country, where Industry 4.0 will form an integral part of the technology focus. This trade fair for industrial technology is the beginning of a continued dialogue between India, Germany and other global partners to proceed on Make in India and in merging this initiative with Industry 4.0. If we succeed, we will be able to increase India's manufacturing GDP contribution to the targeted 25% and become the "smart factory of the world'.

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